Mugabe Attempts to Reduce Prices

Zimbabwean President Mugabe continues to demonstrate is less than complete understanding of economic issues by issuing a decree that “cuts prices” on staple and necessary goods by half, including sugar, newspapers, oil, bread, and salt.

We’ll see if this move is as successful as Mugabe’s earlier attempt to make inflation illegal. How’s that working so far? Well,the BBC reports that inflation has hit an annual rate of 3,700% with an increase of 300% last week alone, while the NYTimes article estimates 4,000% and notes some economists privately estimate inflation may be at 20,000%. Those are not typos.

This new price policy is being coupled with a renewed drive by the Zimbabwean government to increase the percentage of ownership of “indigenous” citizens in publiclly traded companies. Although the proposed program appears less draconian than Mugabe’s earlier program to transfer ownership of white Zimbabweans’ farms to black Zimbabweans, a policy credited as a major factor of Zimbabwe’s economic decline, it looks like a desperate effort by Mugabe’s government to shore up support from his base and provide a new opportunity for his cronies to get raid the rubble of Zimbabwe’s once promising economy.

Protests Erupt in Iran in Response to Gas Rationing

“Guns, fireworks, tanks, [President] Ahmadinejad should be killed,” chanted angry youths, throwing stones at police.

That has to be a rough way to start your day. The Iranian government announced and quickly implemented a long-rumored gas rationing program, and public protests quickly erupted in  response. This move follows an earlier reduction in generous government subsidies of gas, resulting in price increases of almost 25%. The new program limits private drivers to approximately 26 gallons a month. Although Iran is a major oil producer, it lacks the infrastructure to refine gas and relies on importing almost 40% of its gas.

Gas is one vulnerability of the Iranian regime that the international community has yet to utilize. An embargo on gas exports to Iran has been discussed as a new measure to be included in a new round of sanctions. Furthermore, the government’s attempt to ration gas could increase already rampant inflation. Ahmadinejad’s regime has relied on claims of improving the economic situation of the common man and these developments will definitely not help alleviate the common Iranian’s struggle. Prior to the price increases and the rationing, gas sold for approximately $0.33 per gallon.

Hu Jintao: “One party today, one party tomorrow, one party forever.” 

In a speech prior to a fall Chinese Communist Party meeting, Chinese President Hu Jintao stressed that although the CCP will continue to press for the political transformation of China, the future of the Chinese political system is a one-party system. While this comes as no surprise and is not a change of policy, it should be another sign to Sino-philes who believe China is undergoing a gradual political transformation that that process is not likely. As noted in the article, President Hu has allowed more debate among intellectuals in party journals about reform in China’s political system, but “western-style democracy” has been belittled while advocating democracy as “increased public participation” in the party structure.

Note - “western-style democracy” includes individual freedoms, freedom of speech, press, assembly, religion, while “increased public participation” in party functioning merely include more “consultation” in CCP’s decision making. Sounds good to me!